4 Best Practices for Preventing Airline Fraud

By
Mark Michelon, President
October 24, 2017

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Data is the key to identifying and preventing fraud in the airline industry. But there is so much data—spanning direct and indirect transactions through a number of engagement channels—that fraudulent activities are like needles in a very large haystack.

The best way to find those needles is to remove the haystack, weeding out legitimate customers and transactions in order to focus on those with the greatest likelihood of criminal intent. That requires a comprehensive fraud prevention strategy, supported by a robust machine learning model that leverages data from many of the world’s largest airlines.

Here are four best practices for preventing airline fraud:

1. Combine and analyze data from all customer channels

Airlines need to combine all transactional data into a single system and analysis model. That means direct sales through the web, call center, and ticket counter as well as indirect sales via affiliates and travel agencies. Ticket sales are only part of the equation, however. Airlines must also track ticket exchanges, upgrades, frequent flyer miles, loyalty points, gift cards, and marketplace purchases.

2. Supplement with external data

External data can supplement and enhance internal data sources, providing a more comprehensive view of individuals and the legitimacy of their transactions. Analyzing IP addresses, credit card data, and email addresses can greatly improve an airline’s understanding of who is doing what—and from where they are doing it.

3. Develop an automated, scalable fraud prevention strategy

Analyzing all of this data requires a holistic strategy—often with support from fraud prevention experts—that can scale with spikes of activity and adapt to fraudsters’ changing tactics. Automation and the computing power of machine learning algorithms are essential, helping scour volumes of real-time transactional data, weeding out valid activities, and flagging potentially fraudulent behavior—without human intervention.

4. Pool data and collaborate with other airlines

When it comes to fraud, the airline industry wins together and loses together. The more airlines can pool fraud-related data—about illicit individuals, credit cards, email addresses, IP addresses, and tactics—the better they can protect themselves and each other.

These best practices cannot be limited to a single department or engagement channel within an airline’s organization. They must be tackled holistically across all customer touchpoints—day to day, hour to hour, minute to minute. Fortunately, fraud prevention experts like Accertify have a wealth of experience in the airline industry and can help with everything from strategy and process development to data analysis and staff training. And they utilize airline-specific machine learning models that leverage data from some of the largest global carriers to uncover the latest, most specific insights.

Accertify, Inc., a wholly-owned subsidiary of American Express, is a leading provider of fraud prevention, chargeback management, and payment gateway solutions to merchant customers spanning diverse industries worldwide. Accertify’s suite of products and services help e-commerce companies grow their business by driving down the total cost of fraud, simplifying business processes, and ultimately increasing revenue. For more information, please visit www.accertify.com.

About the Author

Mark has recently been named President of Accertify. Since joining the company in 2008, Michelon has overseen several key functions at Accertify, including the creation of its Global Managed Services and Professional Services teams, which provide critical fraud screening, chargeback management and other fuctions to help merchants mitigate risks in digital commerce. Under Mark’s leadership, these teams have enabled Accertify to consistently grow revenue, attract new clients and retain existing customers. Prior to joining Accertify, Michelon was senior Director of Fraud Prevention for Orbitz Worldwide, where he oversaw the global fraud strategy for the online travel site and its sister websites in the EMEA and JAPA regions.